shareholders equity

Question 1

When issuing Treasury stock at less than par

Answer 1

First till amount is 0 it will come from TS then Retained Earnings

Question 2

Stock options stock rights and stock warrants

Answer 2

stock options exercised by employees stock rights exercised by shareholders . All are of different names but used to get more shares

Question 3

Intrinsic method

Answer 3

When fair value of the stock cannot be measured by any other method the entity will measure fair value of the stock by intrinsic method

Question 4

Cliff vesting

Answer 4

Options vest 100% at once or after 5 years of service

Question 5

Graded Vesting

Answer 5

Employees are vested 20 % after three years until they are vested 100% after 7 years

Question 6

Measurement date

Answer 6

Grant date

Question 7

Dates which are relevant to dividend

Answer 7

Declaration Date, record date,payment date

Question 8

Various types of dividends

Answer 8

Cash, property,Scrip,liquidating, Stock,stock Split

Question 9

What are dividends which don’t reduce stockholders equity

Answer 9

Stock dividends and stock splits

Question 10

Quasi reorganization

Answer 10

fresh start cr retained earnings and assets which are overvalued and debit C/S and APIC

Question 11

property dividend

Answer 11

will be declared at FMV at the date of declaration

Question 12

prior period adjustment

Answer 12

is net of tax

Question 13

B.V of Common Stock

Answer 13

Total stockholders equity-preferred=$/C.S O/S

Question 14

What are the three methods of accounting of TS under IFRS

Answer 14

cost par and constructive retirement method

Question 15

Contra equity

Answer 15

reduction of total equity O/S

Question 16

General Rule

Answer 16

If youhave a plug you never credit retained earnings . But you can debit it

Question 17

parvalue

Answer 17

contra C/S

Question 18

Under Par Value method

Answer 18

T/S is for par value

Question 19

Cost method vs method-

Answer 19

Under the cost method TS will always be debited and credited for all transactions. You will not see APIC CS.

When repurchasing stock- Under cost method- just debit cash and credit Tresury Stock. Under par value method, Debit apic commonstock for the amount less par also debt treasury stock for par credit cash for the amount received . Then credit cash for the amount received and credit APIC treasury for plug.
Resell is like a new issuance istead of instead of credit cs we will credit ts for par.

Question 20

pre emptive right

Answer 20

the preemptive right safeguards a shareholders proportionate owenership. It is the right to purchase prorate amount of new issuance of stock

Question 21

property dividend

Answer 21

property dividend is declared at fair value at the valuation date